[119] Courts in the United States have addressed this issue.They have also rejected the notion that a person can avoid liabil-ity simply by submitting that s/he did not know that the originalsource of the material non-public information was an insider.Those courts have held that consciously avoiding any inquiry asto the source of the information does not remove liability. By wayof example, the United States District Court for the SouthernDistrict of New York said in S.E.C. v. Musella, 678 F. Supp. 1060(Dist. Ct. N. Y. 1988), at p. 1062:Scienter in insider trading cases is not, and as a matter of public policyshould not, be limited to those in direct contact with the primary tipper.Rather, the issue is whether a tippee, wherever he stood in a chain oftippees, “either knew or should have known that he was trading on improp-erly obtained non-public information.”. . . . .

Both O’Neill and Martin made a conscious and deliberate choice not to ask
John Musella any questions about the confidential source whose existence
they suspected.

[120] The factual findings relating to Miller can be stated
simply. Miller acknowledged that his knowledge of Masonite
came only from L.K. Miller had not previously owned the stock.
Miller had not followed Masonite, and Miller did not do any
research on Masonite before buying the stock. Nevertheless, Miller purchased Masonite shares to the extent that his holding of
Masonite shares became the largest position in his portfolio.

[121] Contrary to Miller’s submission, the Panel did undertake an analysis of whether L.K. was in a special relationship,
and also whether Miller ought to have known of that special
relationship. While admittedly there is no express finding by the
Panel that L.K. was in a special relationship, that finding is
implicit in their reasons. The Panel reviewed a number of factors relating to L.K., including:
(a) L.K. and Miller knew each other well in 2004.

(b) L.K. was a partner in a prominent Montreal accounting and
auditing firm, a fact known to Miller. Miller would understand that LK had clients, business relationships, and
friends involved in transactional activities in Montreal.

(c) Miller was a senior investment adviser, with a big book of
business at TD. He knew, or would be deemed to know, the